Úno 11

New Jersey Cracks Down on Fraudulent Bitstrade

· February 11, 2018 · 7:00 am

Following the fallout from fraudulent Ponzi-scheme Bitconnect’s demise, New Jersey has officially ordered cryptocurrency investment entity Bitstrade to stop offering unregistered and fraudulent securities in the state.


New Jersey regulators have uncovered yet another fraudulent cryptocurrency investment company.

The announcement comes by way of Attorney General Gurbir S. Grewal and the Division of Consumer Affairs and has been ordered by the Bureau of Securities after an investigation found Bitstrade to be in violation of New Jersey’s Uniform Securities Law.

ponzi scheme

Bitstrade was found to have sold unregistered securities while guaranteeing upwards of 10 percent daily returns, despite lacking a proper registration to sell securities in New Jersey.

Bitstrade also failed to disclose what have been deemed “key material facts” to prospective investors, including an official address, the names of its executive officers, the company’s financial status, potential risks to investors, and how investors’ money is used. Attorney General Grewal stated:

The Bureau’s action today reinforces our commitment to protecting investors as they navigate the uncharted and largely unregulated domain of cryptocurrency-related investments. We want to make sure that investors tempted to cash in on the cryptocurrency rage aren’t being lured into sending funds to an anonymous internet entity without knowing where the funds are going or how they’ll be used.

A visit to Bitstrade’s official website indicates that all signs indeed lead to a Ponzi scheme.

The company claims to be registered in the United States and purports to guarantee “outstanding returns” by “working as an investment pool, collecting multiple lower value investments and grouping them into one single HUGE investment, using those funds to trade on the stock market”—without any actual information as to how they use investors money.

BitConnect Sued By 6 Investors Who Lost Over $700K

If it sounds too good to be true, it probably is. According to Sharon M. Joyce, Acting Director of the Division of Consumer Affairs:

What makes Bitstrade’s fraudulent offer potentially more harmful for unsophisticated investors is that cryptocurrency is virtually anonymous, so there is no recourse for investors to recoup their losses. We’re reminding investors to be extra vigilant about fully vetting what is being sold before investing with cryptocurrency.

The Bureau additionally found Bitstrade’s Redland, California and Scottsdale, Arizona addresses to be falsified.

According to Christopher W. Gerold, Chief of the Bureau of Securities, “Bitstrade is a prime example of a company seeking to capitalize on the cryptocurrency craze. Regulators, including the Bureau, are actively responding to fraudulent crypto-cloaked securities offerings.”

Bitstrade requires purchases be made with Bitcoin.

Do you think Bitstrade is a Ponzi scheme? Do you agree that state regulators should actively try to prevent individuals from investing in fraudulent companies? Let us know in the comments below!


Images courtesy of Bitcoinist archives.

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Úno 10

France & Germany ‘Threatened’ by Bitcoin, Want Global Crypto Crackdown

· February 10, 2018 · 9:45 am

With Bitcoin and other cryptocurrencies finally bouncing back after a steep correction to start the new year, finance ministers in France and Germany are looking to shut down the party by calling for a crypto crackdown.


France and Germany ‘Threatened’ by Cryptocurrency

French and German finance ministers continue to call for strict regulation on Bitcoin and other cryptocurrencies.

According to reports, French Finance Minister Bruno le Maire and interim German Finance Minister Peter Altmaier signed a letter to fellow G20 finance ministers, in which they claim cryptocurrencies are not only risky for investors but also threaten long-term global financial stability. They write:

Given the fast increase in the capitalization of tokens and the emergence of new financial instruments … these developments should be closely monitored.

They also claim that cryptocurrencies “are currently largely mislabeled as ‘currencies’ in the media and on the internet,” creating a “lack of clarity” which “can only fuel speculation.”

Bitcoin Germany

The finance ministers additionally claim to be the good guys, looking out for newbie cryptocurrency investors who aren’t quite sure what they’re getting themselves into, writing:

… the buildup of individual exposures to such volatile tokens could have damaging consequences for misinformed investors who do not understand the risks they are exposing themselves to.

Of course, these sentiments can easily be interpreted as authorities from traditional financial institutions feeling the mounting pressure from a rapidly increasing and ever more popular cryptocurrency market, which very much aims to disrupt traditional financial structures.

FUD, FUD, and More FUD

Finance Minister Bruno le Maire and interim German Finance Minister Peter Altmaier are not alone in expressing fears over Bitcoin and cryptocurrency. Other individuals from traditional financial institutions are also voicing their concerns.

European Central Bank board member Yves Mersch expressed his negative opinion on Thursday, stating that cryptocurrencies are “not money, nor will they be for the foreseeable future.”

ECB EU

Additionally, Bank for International Settlements head Agustin Carstens expressed his deep-rooted fears, begging central banks to shut down Bitcoin—claiming cryptocurrencies are “piggybacking” on established institutions and becoming a “threat to financial stability,” stating:

[Bitcoin is] a combination of a bubble, a Ponzi scheme and an environmental disaster.

Now that’s some serious FUD.

What do you make of French and German finance ministers calling for a global cryptocurrency crackdown? Does this worry from mainstream financial institutions signal their growing fear of Bitcoin? Let us know in the comments below!


Images courtesy of AdobeStock, Shutterstock, Bitcoinist archives.

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Úno 06

FUD Storm Continues as China Steps Up Pressure Against Cryptocurrencies

· February 6, 2018 · 9:00 am

Following false fears of a Bitcoin ban in India, the FUD storm continues as China looks to completely eradicate cryptocurrency trading—but can they succeed?


Chinese FUD Strikes Again

It’s been a rough month for Bitcoin and the cryptocurrency market. The price of the dominant cryptocurrency has dropped below $8,000, and many altcoins have suffered even more significant losses, following a seemingly endless flood of FUD (Fear, Uncertainty, and Doubt) from mainstream media outlets.

Now, it appears the FUD of the day is that China, already notoriously unfriendly towards cryptocurrency, is ready to block all access to cryptocurrency trading websites and initial coin offerings (ICOs) by utilizing its notorious Great Firewall of China.

China

The troublesome story comes primarily from Financial News, a publication affiliated with the People’s Bank of China (PBOC), which is quoted as stating:

To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs.

Since then, advertisements for cryptocurrencies have reportedly stopped appearing on both Baidu and Weibo—China’s largest search engine and social media platform, respectively.

Scaling the Wall

Though China continues to be an enemy of cryptocurrency, it remains to be seen whether or not their increased measures have a greater effect than their already-instituted domestic ban.

According to the South China Morning Post, the PBOC-affiliated article admitted that recent attempts to eradicate digital currencies by shutting down domestic exchanges haven’t worked as well as planned, quoting:

ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions. Overseas transactions and regulatory evasion have resumed.

The Financial News’ article also spins the planned ban as being for the protection of the country’s citizens, stating:

Risks are still there, fuelled by illegal issuance, and even fraud and pyramid selling.

China has already banned ICOs and domestic cryptocurrency exchanges, but many eager investors inside the country have found workarounds. According to Donald Zhao, a Bitcoin trader who moved to Tokyo following China’s domestic ban, China’s new regulations might succeed in making it even harder for individuals to circumvent the law:

It is common for people to use VPNs [virtual private networks] to trade cryptocurrencies, as many exchange platforms relocated to Japan or Singapore … I think the new move literally means it would be even harder to circumvent the ban in China … people promoting related business programmes may be arrested.

Still, where there’s a will, there’s a way, and people who really want to trade cryptocurrencies will likely figure out how to do so in secret.

China

Though stricter regulations in China aren’t going to help the market recover any faster, it’s worth mentioning that other countries are set to benefit. According to Cathay Capital’s Ace Yang:

It’s positive news for Japan and Singapore, because demand for participating in trading is not diminishing and traders have got to go somewhere.

What do you think about China’s claim to increase measures against cryptocurrency trading? Do you think it will have any long-term effects, or is it just another case of FUD? Let us know in the comments below!


Images courtesy of Shutterstock, Bitcoinist archives.

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Led 31

South Korea Government ‘Will Not Ban Or Suppress’ Cryptocurrency – Minister

· January 31, 2018 · 6:30 am

South Korea’s government has confirmed it has “no intention” of banning or “suppressing” cryptocurrency trading in fresh comments on the industry.


‘No Intention To Ban’

In comments Wednesday quoted by Reuters, finance minister Kim Dong-yeon, who earlier in January said that a shutdown was still a possibility, finally ended apprehension surrounding the future of cryptocurrency trading in the country.

Kim had faced a 200,000-strong petition demanding he be fired from his position after the comments, which along with those by justice minister Park Sang-ki, sent shock waves through cryptocurrency markets and sparked public outrage.

South Korea won't ban crypto trading

“There is no intention to ban or suppress cryptocurrency,” he said.

The confirmation may come as less of a surprise to some, as Seoul moves forward with regulatory improvements to the exchange sector at breakneck speed in recent weeks.

In addition to tax and security obligations, an anonymous trading ban became law Tuesday, with exchanges now obliged to ensure account identities match those of bank accounts.

The pace of change is already causing teething problems, however, as Bitcoinist reported as the ban commenced that big-volume exchanges were finding it considerably easier to work with banks to stay compliant.

Conversely, smaller exchanges faced being cut off from the market through lack of compliance as banks failed to cope with demand. This, sources say, could see one million users caught out.

crypto exchange

Soeul Goes After Illegal Actors

Not just bonafide actors, but also the shadier side of South Korea’s trading market has caught the attention of regulators.

Customs in the country has announced it has uncovered “illegal foreign exchanges” involving cryptocurrency worth almost $600 million this week, with investigations ongoing.

The organization stated:

Customs service has been closely looking at illegal foreign exchange trading using cryptocurrency as part of the government’s task force.

Bitcoin prices have, meanwhile, stopped reacting to developments in South Korea’s regulation after Japan’s major hack and legal troubles at Tether stole the limelight.

What do you think about the latest developments in South Korea? Let us know in the comments below!


Images courtesy of Pxhere and Bitcoinist archives.

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Led 24

South Korea Fines 6 Exchanges For Security Law ‘Violations’

· January 24, 2018 · 8:30 am

Six major South Korea cryptocurrency exchanges have received fines of around 25 million won ($23,500) for lax security measures which “violated” laws.


6 Of 10 Exchanges Ordered To Pay

As local news media outlet Yonhap News Agency reports Wednesday, government officials will press forward with penalties in what some commentators view as an increasingly promising sign of bringing the domestic cryptocurrency industry under regulatory control.

“Although the size of transactions and the number of users are surging, overall user protection measures are insufficient,” the publication quotes the Korea Communications Commission (KCC) as saying.

South Korea

The decision to fine exchanges flouting the Information and Communications Act, which include well-known names such as Korbit, Coinone and Coinplug, follows a joint investigation into security setups at ten exchanges which several government agencies ran from October to December last year.

‘Tiny’ Fines

The move is the latest is Seoul’s ongoing bid to solidify the exchange market, having confirmed this week that anonymous trading would end January 30 and exchanges must pay tax on 2017 profits in full by April 30.

Reactions have been mixed, with native exchange users in particular sensitive following mass uproar resulting from the government’s handling of the issue over the past months.

Consensus appears to be similarly lacking on the fines, a KCC source telling Yonhap the amounts involved are “too low” and industry figures likewise voicing suspicions.

“I know there is an indication that the amount imposed on each operator is too low, but this measure imposes the maximum amount possible under current information and communication network law,” the official stated.

Nonetheless, security problems at Korean exchanges have received significant negative press amid rumors North Korea was stealing funds for its own ends on a regular basis.

Amid the suspicion, one media company hired white hat hackers to create and then compromise accounts on five exchanges, which it reports was successfully done with what it describes as “basic” tools.

What do you think about the South Korean exchange fines? Let us know in the comments below!


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Led 19

Singapore Bitcoin ATMs Sold Out, Trading Still Allowed

· January 19, 2018 · 6:30 am

When markets are volatile and crashes occur, the majority of people are cashing out and taking profits or panic selling. There are some, however, who see opportunity in the sea of red and buy up at lower prices. This is exactly what has been happening in Singapore this week when Bitcoin ATM machines ran dry.


According to reports, Bitcoin machines in downtown Singapore sold out of the virtual currency yesterday as prices plummeted below $10,000 for the first time since the end of November.

Lions and Bulls

Amid more confusion over clampdowns across the Asia Pacific region, prices fell and markets dropped as much as 40% since highs just after New Year. Much of the impetus for crypto market prices originates in Southeast Asia where they are traded heavily. Western media outlets, such as Reuters and CNBC, amplify the FUD when they misreport about total clampdowns that have not occurred.

Singaporeans, however, remain unperturbed and have been snapping up the digital currency at low prices. One café manager who has a Bitcoin ATM told media:

We had to put an ‘out of service’ sign at our machine. Over the past two days, we’ve had 20 to 30 people line up, from about 10 on a usual day.

Bitcoin Exchange founder Zann Kwan, who owns two machines on the island state, said the buying frenzy was bigger in December as BTC approached record highs:

Sellers are holding back in anticipation of higher prices, so we have less bitcoin supply. Buyers on the other hand are hoping prices will crash some more, so they can buy.

Nobody Panic

Experienced crypto traders and Bitcoin investors will know that market corrections are nothing new. However, a wave of panic sets in when those who are new to the markets rush to sell off their crypto for fears of a complete collapse. The despair was wide-reaching with suicide helplines appearing in crypto groups in the US. Additionally, South Koreans posted pictures of smashed up computers in anger at their government’s constant indecision and threats to close exchanges.

The official stance of the Monetary Authority of Singapore was outlined to the media:

MAS regulates the activities that surround virtual currencies if those activities fall within our scope as a financial regulator. The risks surrounding virtual currency exchanges include those related to money laundering and terrorism financing (ML/TF). Virtual currency transactions, given their anonymous nature, are particularly vulnerable to abuse for ML/TF. MAS will therefore introduce anti-money laundering and countering the financing of terrorism requirements on virtual currency intermediaries that deal in or facilitate the exchange of virtual currencies for real currencies. The regulations will extend to the exchange of virtual currency for fiat currency, or another virtual currency.

As in South Korea, the government wants more transparency and less anonymity with cryptocurrency trading. It does not want to shut it down.

Do you use Bitcoin ATMs to buy and sell? Let us know your experiences in the comments below.


Images courtesy of Wikimedia Commons and Bitcoinist archives.

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Led 15

South Korea Won’t Ban Bitcoin Trading as Price Chart Turns Bullish

· January 15, 2018 · 7:00 am

Bitcoin pundits are forecasting a fresh bull run as news from South Korea and the cryptocurrency’s price turn markets increasingly optimistic.


Seoul To Regulate After ‘Sufficient Consultation’

After the South Korean justice minister caused “confusion and anger” last week by saying the government would ban cryptocurrency exchanges, local news media report, the latest statements from Seoul indicate a significant U-turn.

“The proposed shutdown of exchanges that the justice minister recently mentioned is one of the measures suggested by the justice ministry to curb speculation,” Yonhap News Agency quotes a statement from the Government Office of Policy Coordination today.

A governmentwide decision will be made in the future after sufficient consultation and coordination of opinions.

Politicians had previously sought to impose strict controls on Bitcoin and cryptocurrency trading activities within a seemingly very short timeframe.

South Korean Prime Minister Warns Youth That Bitcoin is a Gateway to Illegal Activities

In December, new laws were passed which would have significantly limited exchange activities from as early as January 20.

After mass public uproar and most recently accusations lawmakers were “ridiculing the Korean people,” the outlook for cryptocurrency regulation in South Korea has suddenly begun to look notably more constructive.

“Monday’s announcement suggests that a shutdown is not likely in the near future,” Yonhap concludes.

Bitcoin 50-Day Moving Average Dip Excites Investors

Across global markets, Bitcoin prices are already reacting in kind to the new hope, with one analyst noting Monday’s dip below the 50-day moving average is characteristic of an impending move upwards.

Korea had been the most active trading community in the world for Bitcoin, its influence still conspicuous; a petition even calling for senior ministers to be fired over legislation mismanagement accrued over 130,000 signatures in days, Bitcoinist reported last week.

Meanwhile, details of the style of regulation that could take hold in the coming months remain sketchy.

Across the water in Japan, a more advanced model of permissioned exchange trading appears to be delivering positive economic results. Analysts have even said that Bitcoin investors alone could already be contributing as much as 0.3% to the country’s GDP.

What do you think about the latest developments from South Korea and their impact on Bitcoin? Let us know in the comments below!


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Led 11

The Noose Tightens? US Senate Meeting with Market Regulators Over Cryptocurrency

· January 11, 2018 · 6:00 am

Bitcoin regulations may be on the way as the US Senate Banking Committee is scheduled to meet with top market regulators in February over cryptocurrency.


The noose may be tightening around Bitcoin and its digital brethren in the United States in the coming months. According to Reuters, the Senate Banking Committee will be meeting with some top financial regulators in early February. Their topic of concern – cryptocurrency.

Are Regulations Coming?

Right now, there are no federal regulators that oversee cryptocurrency within the US. The government (and most importantly, the IRS) view crypto as property that’s subject to capital gains taxes.

However, this may change in the future. The Senate Banking Committee will be talking to Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo and Securities and Exchange Commission (SEC) Chairman Jay Clayton to discuss Bitcoin and other cryptocurrencies, along with any risks that crypto trading can bring to the public.

Will this meeting lead to future Bitcoin regulations? My magic 8-ball says that it’s a distinct possibility.

Governments Yearn for Control

The reality is that the CFTC and SEC have been staking out some jurisdiction over crypto. The CFTC did allow both CME and CBOE to begin listing Bitcoin futures contraacts last month. However, they are now reviewing their process for this after receiving some criticism.

It should be noted that both the SEC and CFTC have issued warnings about the volatility of cryptocurrency and that they may not be able to protect investors from crypto scam artists. There are always those looking to earn some ill-gotten gains by using crypto as the lure. Case in point is BitConnect, who were shut down by the state of Texas over their claims of monetary rewards.

Yet any time government committees get together, it should be a cause for concern. The reality is that any national government will not be too friendly with an economic system that lies outside of their control. To that end, you can bet that regulations are at the forefront of every senator’s mind when that meeting rolls around.

Of course, one of the chief draws for cryptocurrency is its lack of centralization and regulation. Many view virtual currency as an expression of economic freedom, but governments look at crypto in a different light: something to control and to tax.
Shidan Gouran, president of Global Blockchain Technologies Corp. summed up the thought that one of the reasons why cryptocurrency was so valuable was due to a lack of regulation. He said:

We believe that the greatest threat is regulation. Several governments across the world have clamped down on exchanges, some halting trading altogether. Others have gone on to outright ban the use of Bitcoin. Sudden government actions in major Bitcoin trading hubs stand to disrupt the market, with the potential to severely affect the utility of bitcoin — and accordingly, the value.

Are you worried that the upcoming Senate Banking Committee meeting will lay the cornerstone for increased Bitcoin regulation? Let us know in the comments below.


Images courtesy of Pixabay, Wikimedia Commons, and Bitcoinist archives.

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Led 03

Malaysia Remains Open to Crypto Trading

· January 3, 2018 · 6:30 am

With the majority of Asian nations attempting to regulate cryptocurrency exchanges, the number of those declining to clamp down is dwindling. Malaysia is among those nations that are currently free from regulatory laws and are not imposing a ban on crypto.


According to the Malaysia Reserve, the country’s finance minister said that the central bank will not impose a blanket ban on cryptocurrencies as such action will only curb innovation and creativity in the financial sector, particularly fintech. In an interview with the news outlet, he stated:

The government is fully aware of the need to strike a balance between public interest and integrity of the financial system.

Public Protection

Similar to action in Thailand, Malaysia wants to inform and protect the public from making rash investments in the nascent crypto markets. The ministry said that the monetary authority is taking a cautious approach with digital currencies, including Bitcoin, to ensure safety measures are in place to protect the interest of the public.

The statement went on to say:

It is not the intention of the authorities to ban or put a stop on any innovation that is perceived to be beneficial to the public. However, similar to any financial and investment schemes, there is a need to have proper regulation and supervision to ensure any risk associated with such schemes are effectively contained.

Malaysian Government to Introduce Regulatory Framework for Cryptocurrencies

No Regulation

Currently, Bank Negara Malaysia (BNM) does not regulate cryptocurrencies. However, it will ensure that exchanges comply with requirements to conduct customer due diligence and report suspicious transactions to the authorities. This is a similar stance to that taken in South Korea, where authorities have laid out plans to regulate how exchanges handle their clients to prevent money laundering and criminal activity.

The Malaysian finance ministry went on to state:

Financial innovation will not only enhance productivity of economic activities, but also make financial intermediation more seamless, it is imperative for the authorities to have a thorough understanding on digital currencies before embarking on any policy actions. This is particularly relevant to recent innovation like bitcoin, which remains unregulated globally and not battle-tested against shocks, unlike more conventional mediums of exchange.

With a global market capacity rapidly approaching $700 billion and the majority of crypto trading taking place in Asia, governments and central banks in the region need to get ahead of the game.

Will Asian nations continue to lead the way in the crypto markets? Add your comments below. 


Images courtesy of GoodFreePhotos, Pixabay, and Bitcoinist archives.

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